I am continuing my study of what is being taught in many public schools with respect to Savings and Investing. This information is provided by the Jump$tart Coalition and while not all public schools use the information many do.
One of the things I do throughout the year is judge high school Speech tournaments. I am routinely struck by the talent of today’s students and I think it is a shame that we don’t often do a good enough job challenging them.
This article will look at Savings and Investing as it relates to what high school seniors should know by the time that they graduate.
The topic is “Saving and Investing” and it has six key areas referred to as “Standards.”
Standard One is the ability to identify why saving helps to bring peace of mind.
The senior student should be able to identify the difference between long-term and short-term reasons for saving. They should be able to describe and define what wealth is.
Perhaps the most important aspect of this issue is to understand how to save. It is important to “pay yourself first” out of the money you earn. Usually using a percentage is a good way.
Standard Two is the ability to explain how investing builds wealth.
At this point the entire topic becomes a little more complex. The student or graduate should be able to explain how investing can play a role in building wealth. The student should be able to explain investment strategies including time frames and rates of returns. Finally they should be able to identify the impact and importance at the different stages of life including retirement.
Standard Three asks the student or graduate to “evaluate investment alternatives.”
The student in this situation is expected to know and understand various types of investments. Of course some investments are riskier than others so it is important to be able to mix them and use them based on need and opportunity. If you are older you certainly do not want to put all of your money into a risky investment. On the other hand if you are 25 and have a very good income you can probably afford to take some chances.
Standard Four asks the student/graduate to explain how to purchase investments.
There are many questions regarding this standard. “How do you pick a good investment advisor?” What is “Dollar-Cost Averaging?” “How do you identify past performance of an investment?
Standard Five asks the student/graduate to understand the impact of taxes on profits from savings and investments.
In addition to understanding the tax rates of various investments and innate costs such as a broker’s fee, the student/graduate is asked to understand tax-deferred and tax exempt products.
Finally Standard Six asks the student/graduate to understand laws that govern these savings and investments.
If we look at the news of the day we see that there are a lot of changes being made in the area of finance. It will become more complex over the coming years.
It is mandatory that our children are prepared both by the school and their parents.
“Saving and Investing,” Article, “Twelfth-Grade Expectations” Jump$tart Coalition for Personal Financial Literacy, Charles Schwab
Investopedia Website, “Dollar-Cost Averaging-DCA”